It is important to understand the entire scheme of span of Kaizen®. There is a misconception in the industry as to what kaizen truly means. Is kaizen small improvements made by anybody, anywhere in the organization? Is it improvement activity taken up in spare time or is it a suggestion scheme for shop floor employees.
Over the years the world has come to symbolize different things to different people. A common theme however is disparate improvements made occasionally here and there in the organization.
Figure 1 Kaizen® Strategy “Model”
In essence a scheme introduced by management to keep people motivated and to make point level improvements with little apex direction of focus.
Plunging a little deeper – is Kaizen® any longer optional for any enterprise?
To answer this question, let’s look at the three stakeholder central to any organization.
In the first place organizations – commercial or non-commercials – exist only as long as they have customers for their products or services. Secondly, they must meet the objectives that management/shareholders/trustees set out of the organization along its purpose line. And thirdly, the organization must necessarily fulfill the aspirations of its employees, the people who deliver against customer’s expectations and organizational goals.
The need for customer focus:
How many organizations from the 1960’s are still around today? Of those that are, what ensure their survival? Clearly dynamics at the market place have changed dramatically over the decades. No longer our business operating in a “monopolistic” or “supply” context. Technical know-how to deliver quality products and services is now extensively available. Today, companies that are winning at the marketplace are ones who in the first place, make continuous efforts to understandcustomers’ needs and what customer value in the product or service. Secondly, these companies have quality assured processes and systems that translate customer insight with integrity through their product innovation cycles and supply chain. Having said this, with a number of quality options now available at the market place – and smarter customers – purchase choices are increasingly being made after evaluation of overall value for money spent.
Thus, the challenge for enterprises has moved in recent times from marketing a quality product to marketing and delivering quality product at the lowest possible cost. In light of the above, is Kaizen® an option for any enterprise or necessary even to just stay in the game?
The need for continuously improving being clear, one often hears management debating priorities: Customer first or Employee first? The question itself is in error and best left alone. In truth, “demands” of all three stakeholders must be addressed in the continuous improvement journey.
Customer looks for On Time, In Full and Error Free delivery of a product or service and expects quick resolution of complaints. Shareholder/Management focus is primarily on gaining market share, improving margins and ensuring healthy cash flow. Employees, on the other hand, are seeking to be part of an enterprise that provides challenging work, a supportive organizational climate and opportunities for learning and personal growth.
What distinguishes Kaizen® approach from other improvement practices?
True Kaizen® is focused improvements and directed by the organizations understanding of customer requirements. The essential idea being to take up projects of strategic importance from a customer perspective and conduct problem solving in PDCA – SDCA cycle to ensure improvements are sustained. When this is the aimed and practiced by Everybody, Everyday and Everywhere in the organization, results that management and employees seek are a natural outcome (reduced costs, improved team work, etc).
Key to the Kaizen® approach is a fundamental knowing that waste is intrinsic in organizational processes.
Figure 2 illustrates this aspect.
From a customer perspective, activities in the organization, he would be willing to pay for are ones that add value efficiently to inputs in the direction of the promised output.
Figure 3 Long term company value
Studies show that, for most organizations starting out on a Kaizen® journey, Value Adding activities (VA) are normally < 5% of total. A full 95% are Non-Value Adding activities (NVAs). Of the latter, it is estimated that some 35% are essential NVAs and that up to a whole 60% are completely wasteful. Some examples of waste in the manufacturing context are: waiting, re-work, over-production, inventory, motion, and transportation and over-processing.
The Kaizen® methodology
It is important to integrate the building blocks of Kaizen®, which are the cross functional Kaizen® workshops, Value Stream Kaizen® and development of Kaizen® model at a global level and integrating it with business needs. In starting out on a Kaizen® journey, the recommended approach in operations is to have cross functional team conduct an end-to-end Value Stream Mapping (VSM) exercise for the specific product/service family in which improvement is sought from both a customer & management perspective. The purpose of the VSM exercise is to make “wastes” in the end-to-end processes visible. Once this is done, the appropriate problem solving tool from the Kaizen® toolbox is deployed to move from the current to the future state.
Kaizen Change Management:
Managing operational transformation in the Kaizen® way requires systematic and structured approach. This is embodied in the Kaizen® Management System (KMS). Central to this is a Kaizen® strategy that the organization needs to develop within its specific context. The over-arching aim of this strategy is to optimize delivery to customers while delivering financial benefits to shareholders/management. Delivering world-class performance to customers requires improvement first of one’s own processes via the appropriate Kaizen® toolbox before extending the approach to supplier and distributors. Integral to this work is development of people and establishment of Kaizen® Promotion infrastructure to manage and sustain change.
So, in closing it is clear that one cannot only promote Kaizen® to the front liners; the top most managers must also engage it! Maybe of a different kind and via different approach but if they do it and are send seen doing it, the front liners feel, encouraged & supportive. In the words of Mr. Masaaki Imai, world-class is a journey, not a destination. He says the goal is Every day, Everyone, Everywhere Kaizen®. In many organizations it is someday, someone and somewhere Kaizen. This has to change!
All the very best!
Jayanth Murthy – Director, Kaizen Institute India
Vijay Pandey – Associate Director, Kaizen Institute India
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